D.N.Sinha, J. -
(1.)THE short facts of this case are as follows: THE petitioner carries on business at 10th Mile, Kalimpong in the State of West Bengal. On or about the 10th of November, 1956 the Collector of Land Customs. Calcutta, respondent No. 1, caused searches to be made at the petitioner's business premises at Kalimpong. This kind of search is permitted under Section 172 of the Sea Customs Act, whereby the Customs authorities can make an application before the District Magistrate having jurisdiction in the area to issue a search warrant for the search and seizure of articles, books and documents of the kind mentioned in the said section. This is what was done in the present case. It appears that various articles as well as books of account and documents were seized by the Land Customs authorities. THE petitioner objected to the seizure and it further appears that the Collector, Land Customs issued a snow cause notice upon the petitioner on or about January 3, 1958. THE petitioner showed cause and on the 4th of June,1958 the Collector of Land Customs ordered the return of the articles. With regard to the books and documents, the Collector of Land Customs, Calcutta, informed the petitioner that the books were under examination and would be returned when they were done with. This application has been made on the footing that although a long time had expired, the Land Customs authorities were not making over the books and documents to the petitioner. In the meanwhile, what had happened was that some time in April, 1957 summons was served on the Land Customs Department by the Income-tax Officer, Jalpaiguri-Darjeeling, for production of the seized books and documents, in connection with the assessment of income-tax of the petitioner, and the same had to be complied with. On or about the 27th of March, 1957 the Sub-Divisional Officer, Kalimpong, issued an order on the Customs Department, directing that all seized books of account and documents should be handed over to the Special Police Establishment, which was also done. Some time in July, 1958 the books and documents were returned by the Special Police Establishment and the Land Customs authorities communicated the matter to the Commissioner of Income-tax, West Bengal. It appears that thereafter, so far as the Land Customs authorities are concerned, they have no further use for the books and documents and are prepared to hand them over. An application was however made by the Income-tax authorities to the Sub-Divisional Magistrate. Kalimpong, to the effect that these books and papers should be made over to the Income-tax authorities for a time. On the 29th of December, 1958 an order was made, directing the Collector of Customs, Calcutta to make over the papers to the Income-tax Officer, Siliguri who should retain them in custody for three months and thereafter return them to the party from whom they were seized. This order was slightly erroneous because it is not the Collector of Customs, Calcutta who is in possession but the Collector of Land Customs, Calcutta. A petition was made for amendment of the order, and on the 7th of January, 1959 the Magistrate made an order that the papers should be made over by the Collector of Land Customs in terms of the order dated the 29th of December, 1958. THE position now, therefore, is that the learned Magistrate who had ordered the search warrant to issue, has now directed that the papers should be handed over to the Income-tax authorities for a limited period of time, after which they should be made over to the petitioner. I might mention here that upon this Rule having been issued, there was an interim order, whereby the status quo has been maintained and the Collector of Land Customs could not make over the papers to the Income-tax authorities. In this application, the Income-tax authorities were not made parties. When the application came to be heard, I felt that no satisfactory order could be made without hearing the Income-tax authorities, and directed that a copy of the Rule may be served upon them. THE Income-tax authorities have now appeared before me and Mr. Pal has addressed the Court on their behalf. THE position, therefore, is as follows: Now, the search and seizure itself by the Land Customs authorities is not challenged. So far as the Land Customs authorities are concerned, they have no further use for the books and documents which they are prepared to make over to the petitioner. THE Income-tax authorities however wish to take possession of the books for a limited period. THE question is whether this is permissible. Mr. Roy appearing on behalf of the petitioner argues that the Income-tax authorities are not entitled to make the kind of application that they have made, and the books of account and documents could not be handed over to them. Section 37 of the Income-tax Act provides that an Income-tax Officer amongst others, shall for the purposes of the relevant chapter of the Income-tax Act, have the same powers which are vested in a court under the Code of Civil Procedure when trying a suit in respect of inter alia the production of documents. If the Income-tax Officer is considered as a court, then what has happened- is that one court has requested another court for the production of certain documents lying in its custody. THE question that has been raised by Mr. Roy is as to the jurisdiction of the learned Magistrate to make an order of the nature that he has made.
(2.)SECTION 172 of the Sea Customs Act lays down that any Magistrate may, on the application by a Collector of Customs, issue a search warrant inter alia for books and documents of the nature mentioned therein. Such warrant is to be executed in the same way and shall have the same effect as a search warrant issued under the law relating to Criminal Procedure. The issue of a search warrant under SECTION 172 of the Sea Customs Act, came up for determination in two decisions of this Court. In Calcutta Motor Cycle Co. v. Collector of Customs, I was really dealing with SECTION 171A of the Sea Customs Act. Coming to SECTION 172, I was of the opinion that in a search warrant issued under SECTION 172 of the Sea Customs Act, it should not be necessary to produce the things seized in court, because actually speaking no proceedings were pending therein. I suggested that the form of the warrant should be suitably modified to authorise the Sea Customs authorities to seize the articles and take possession thereof, which is exactly what they are intended to do in such cases. Sen, J. in S. K. Srivastava v. Gajanand Patriwalla, came to consider SECTION 172 of the Sea Customs Act. The learned Judge seemed to think that I had felt some difficulty about the issue of a search warrant because no proceedings were pending before the Magistrate. With great respect, that is not a fact because the right of issuing a search warrant is especially conferred by the Sea Customs Act. The learned Judge however was of the opinion that the goods and documents seized must be brought to the court of the learned Magistrate. As soon as the learned Judge decided this, he was faced with the difficulty created by SECTION 517 of the Criminal Procedure Code, which lays down that it is only when an enquiry or a trial in any criminal court is concluded, that the court may make such order as it thinks fit for the disposal by destruction, confiscation or delivery to any person claiming to be entitled to possession thereof or otherwise of any property or document produced before it or in its custody or regarding which any offence appears to have been committed or which has been used for the commission of any offence. The learned Judge got over this difficulty by stating that the books and documents could be made over to the Customs authorities by 'tacit consent'. With great respect I do not see any provision for that in the Code of Criminal Procedure. Be that as it may, I do not think that there is any difference of opinion on the question that the learned Magistrate could issue a search warrant and whether the goods are to be produced in his court or taken possession of by the Customs authorities the Magistrate continues to be in seisin of the matter and after the conclusion of the proceedings before the Customs authorities, he has authority to order that the books and documents should be delivered to the owner or dealt with in a manner which he thinks fit. In this case, it is not disputed that the learned Magistrate had the power to order that the books and documents should be given back to the petitioner. What is disputed is that he cannot direct that they should be handed over to the Income-tax authorities, who should in their turn hand them over to the petitioner. I do not see any great difficulty in this form o the order. Strictly speaking, the learned Magistrate might have ordered that the books and documents should he returned back to the court and thereafter handed to the Income-tax authorities and then to the petitioner. I do not think that it is absolutely essential in law to follow this circuitous method and I think that it is perfectly legal to say that the books and documents should be handed over to the Income-tax authorities, who should in their turn, hand them over to the proper owners. Mr. Roy has not been able to dispute that SECTION 37 of the Income-tax Act does confer power upon the Income-tax Officer to ask for the books and documents. As I said, it comes down to this, that he insists on the circuitous method being followed. But I do not see any justification for interfering by a high prerogative writ to assist his client in this fashion.
The next point that he has taken is that by reason of delay, the order of the learned Magistrate has expended itself, because it was contemplated that the Income-tax Officer should keep the books and documents for three months commencing from the 29th of December, 1958. As I have said, the Collector of Land Customs was prevented by an injunction of this Court from taking action in the matter, and therefore the order dated the 39th December, 1958 can only be operative from the day that the injunction order is vacated. As I propose to vacate the interim order today, the three months would be calculated from today.
The result is that this Rule is discharged and the interim order is vacated. The parties appearing before me will now act as I have indicated above. As time is pressing, parties are at liberty to act on counsel's endorsement countersigned by my officer. I make it clear that parties will be at liberty to make such applications before the learned Magistrate as they may be advised, for the further conduct of the matter, I am not also adjudicating here as to any other right that the Income-tax authorities may have in relation to the income-tax proceedings. There will be no order as to costs.